Murdoch drops BSkyB bid

In a huge setback for Rupert Murdoch, the biggest deal of his career has collapsed, as News Corp. announced on Wednesday it is withdrawing its $19 billion bid to acquire satellite broadcaster British Sky Broadcasting.

Murdoch’s stunning retreat is a dramatic concession to the burgeoning phone-hacking scandal that began at the News of the World tabloid and is causing big political and business damage to the company at large.

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In a statement, News Corp. Chief Operating Officer Chase Carey said: “We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.”

News Corp. owns 39 percent of BSkyB and had sought to purchase the rest.

The UK’s opposition political leaders cheered the retreat.

Liberal Democratic leader Nick Clegg called it the “decent and sensible” thing to do, while Labour Party leader Ed Miliband said the withdrawal was a victory for the people.

“This is a victory for the people up and down this country who have been appalled by the allegations of phone hacking,” Miliband told the BBC. “Nobody is beyond responsibility. You cannot exercise power in this country without responsibility.”

Murdoch’s retreat came as members of the House of Commons prepared to vote on Wednesday on a measure urging him to drop his bid to acquire the satellite provider, for which all three three major parties have voiced support.

The motion was put forward by the Labour party and has gotten the backing of the Tories and the Liberal Democrats, BBC News reported Wednesday. They say the purchase would not be in the national interest as investigations into phone hacking by the media baron’s newspapers continue.

Cameron also called for the merger to be put on hold, saying that Murdoch should “stop the business of mergers and get on with cleaning the stables.” He also made a formal request for a full review of the role that police played in the hacking and its initial investigation, and asked for a study of the role of the press in Britain.

“There is a firestorm, if you like, that is engulfing parts of the media, parts of the police, and indeed our political system’s ability to respond,” Cameron said, and the focus now must be on helping the victims and punishing the perpetrators of the crimes.

Though Commons’s measure would be nonbinding, it adds another hurdle to the path toward approval of Murdoch’s attempt to buy up 61 percent of the company’s stock for $19 billion. The bid has been delayed for several months by the Competition Commission, which reviews potential mergers for monopoly concerns, and comes as other key British players have asked Murdoch to give up his efforts to buy BSkyB.